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ARPA-E’s budget should be at least $1B, Arun Majumdar says in Congressional hearing

Feb 28, 2019
Precourt Institute

By Mark Golden

To keep the United States competitive in the global energy industry as it pivots toward decarbonization, Congress should triple the budget of the Department of Energy’s Advanced Research Projects Agency – Energy, Arun Majumdar, co-director of Stanford University’s Precourt Institute for Energy and the founding director of ARPA-E between 2009-2012, testified in a Congressional hearing.

ARPA-E funds early-stage research in science and engineering to try out potentially breakthrough ideas. ARPA-E was modeled on the Defense Department’s DARPA, which is credited with inventions including the Internet and GPS technology. ARPA-E has had bipartisan support since it was created in 2009 and Congress appropriated $366 million, a $13-milion increase over 2018. Some Democratic Congressional members want to increase the agency’s budget to $1 billion a year.

“The global energy transition presents a historic opportunity for every country and region, and the race is on to seize this opportunity,” Majumdar said in his prepared remarks Tuesday at the “Future of ARPA-E” hearing by the House Committee on Science, Technology & Space’s Subcommittee on Energy. “We must ensure that the U.S. remains globally competitive and maintains its technological lead, which is part of APRA-E’s mission.”

Majumdar noted that DARPA’s first budget in 1962 was $246 million, the equivalent about $2 billion today.

“If we are serious about creating and leading in a new industrial revolution and competing with China, the E.U. and other parts of the world, Congress should seriously consider ARPA-E’s budget authority to be $1 billion at the very least,” said Majumdar. “With the best scientific infrastructure and talent in the world, and with the entrepreneurial spirit that is in the American DNA, the U.S. has a remarkable capacity to innovate and deliver on ARPA-E’s investments.”

The goals of a much larger research program should very ambitious, Majumdar said. He gave example targets like inventing grid-scale energy storage that costs 10 percent of today’s lithium-ion batteries, next-generation nuclear reactors at half the cost of today’s reactors, cheap production of carbon-free hydrogen, and reimagining how to make concrete and steel with very low carbon emissions.

The hearing’s other witnesses all supported increased funding for the foundational science needed to create decarbonized, affordable and reliable energy systems around the world. Ellen Williams, University of Maryland professor and also a former director of ARPA-E, John Wall, retired CTO of Cummins and Mark Mills, senior fellow at the Manhattan Institute, all advocated for ramping up to about $1 billion over the next few years. The fifth witness, Saul Griffith, founder and CEO of R&D company Otherlab, said the agency’s funding should be raised to $3 billion a year.

“You have a really strong bench in this country in terms of the talent,” said Griffith, a native of Australia. “Unfortunately, they’re sitting on the bench and not playing in energy. They're creating software to sell ads.”

Record of success

Conor Lamb (D-Penn.), chair of the subcommittee, praised the results of research the agency has funded since 2010. “ARPA-E projects have led to 71 new companies,” Lamb said, “and 136 projects that have garnered more than $2.6 billion in private-sector funding.”

The senior Republican member of the science committee Rep. Frank Lucas and the ranking member of the energy subcommittee Rep. Randy Weber said that ARPA-E has strayed somewhat from its original mission to fund early-stage research and instead sometimes funds for more advanced applications. When doing so, they said, the agency duplicates the work of other programs in the Department of Energy. While both spoke supportively of the agency, they said that any increase in ARPA-E’s budget must be offset by budget cuts elsewhere in the department, which spends about $6 billion a year on research. Republican members of the subcommittee did not ask the witnesses any questions.

The Democrat members asked the witnesses how the success of ARPA-E should be measured. The Manhattan Institute’s Mills, for example, said judging the agency by the number of patents generated would be a mistake, because they are expensive to apply for and are not usually appropriate for the foundational energy science work the agency mostly funds.

Majumdar said that no single metric should be used. Instead, measures of intellectual property created, follow-on private-sector investments and other signs of project success should all be used. Even then, he said, measuring the relatively young agency’s success will take years.

“Applied energy research takes today's lithium-ion battery and makes it better and better and better. That's going down an existing learning curve, and that's extremely important,” Majumdar answered Rep. Sean Casten (D-Ill.). “ARPA-E’s role is to create entirely new learning curves that do not exist today. If they're successful they'll be disruptive to today's lithium-ion batteries, so that the competition comes from within the United States, as opposed to coming from outside the United States. By supporting both types of research, the U.S. is hedged.”

Getting new technologies from proof-of-concept research that ARPA-E funds to full commercialization takes 15 to 20 years, said Majumdar, who was also the Department of Energy’s acting undersecretary of energy while directing ARPA-E. In the undersecretary role, he oversaw other research projects on advancing proven applications.

“It’s very important for Congress to be patient in its expectations of commercial impact from ARPA-E funded research,” he said. “Expectations of short-term success will produce incremental thinking from ARPA-E, and that will defeat the whole purpose of ARPA-E, which should be going for the home runs.”

Majumdar also urged Congress to allow ARPA-E to create private-public consortia to enable the U.S. energy industry to compete globally. This would be similar to SEMATECH, a non-profit consortium that performs advanced R&D in chip manufacturing. SEMATECH, started by DARPA in the 1980s, is credited for restoring U.S. leadership in the global semiconductor market.

In addition to co-directing the Precourt Institute for Energy with Sally Benson, Majumdar is a professor in Stanford's Department of Mechanical Engineering, Materials Science & Engineering (by courtesy) and professor of Photon Science at SLAC.